MasterBrand, Inc. announced plans to acquire cabinet maker American Woodmark, for $3.6 billion via an all-stock merger. The two companies seek to combine with the goal of expanding geographical reach and enjoying manufacturing synergies.
According to the deal press release, this merger will “create the cabinet industry’s most comprehensive portfolio of trusted brands and products. The combined company will have an expansive portfolio of world-class brands providing products across a broad price spectrum to better serve a diverse set of customers and consumers.”
Source: Eye on Housing
The home improvement market has languished during the last few years. As previously reported, following the Covid-19 pandemic, there was a boom in construction during 2020-2022, as rock bottom interest rates and consumer focus on their home environments during lockdowns let Americans to build, despite souring construction prices. Lumber and other material prices spiked due to high demand coupled with supply chain disruptions that accompanied the global pandemic turmoil. As the Federal Reserve raised interest rates at a historic pace to fight inflation, it choked off construction, leading to a steep decline during 2023-2024.
Following two years of decline, homeowners’ improvement outlays are projected to grow at a mild pace throughout 2025. “A solid labor market, rising home values, and continued improvement in existing home sales are supporting greater activity in home remodeling and repair,” according to Harvard’s Joint Center for Housing Studies. “Upward trending retail sales of building materials and steady permitting for remodeling indicate that homeowners are slowly but surely expanding the pace and scope of projects compared to the last couple years.”
Source: Projects & Pearls
Of all home improvement, kitchen remodels are projected to provide the highest return on investment at 70-80% – a statistic that may very well increase MasterBrand and American Woodmark’s sales as a combined entity.
According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly-announced transactions, MasterBrand is advised by
Skadden, Arps, Slate, Meagher & Flom LLP. American Woodmark is advised by McGuireWoods LLP.
